Where issued: | The financial | Effective date: | 01/09/2021 |
Date issued: | 01/09/2021 | Status: | Still validated |
THE FINANCIAL | SOCIAL REPUBLIC OF VIETNAM Independence - Freedom - Happiness |
Number: 1676/QD-BTC | Hanoi, date 01 month 9 year 2021 |
APPENDIX NO.04
VIETNAM PUBLIC ACCOUNTING STANDARD NO.17
REAL ESTATE, FACTORY AND EQUIPMENT
(Attached to Decision No. 1676/QD-BTC dated September 01, 09 of the Ministry of Finance)
INTRODUCTION
Vietnam's public accounting standards system has been researched and developed by the Public Accounting Standards Board of the Ministry of Finance to ensure compliance with international accounting practices and conditions. reality of Vietnam. Vietnamese public accounting standards have the same standard symbols as the corresponding international public accounting standards.
Vietnam Public Accounting Standard (VPSAS) No. 17 “Real Estate, Plant and Equipment” Drafted based on International Public Accounting Standard (IPSAS) No “Real Estate, Plant and Equipment” and current regulations on Vietnam's financial and budgetary mechanism. Vietnam Public Accounting Standard No. 17 stipulates the contents consistent with the current legal regulations of Vietnam and the regulations that are expected to be amended and supplemented in the near future. Vietnam Public Accounting Standard No. 17 does not stipulate the contents of the International Public Accounting Standard No. 17 which are not suitable for the long-term financial and budgetary mechanism, the addition of regulations will be made on the basis of according to the actual situation in each appropriate period.
The International Public Accounting Standard No. 17 is based on the 2001 edition, revised to be consistent with other international public accounting standards as of December 31, 12, by the Accounting Standards Board. International Public Accounting (IPSASB) promulgated.
Vietnam Public Accounting Standard No. 17 denotes the ordinal number of paragraphs compared to international public accounting standards. For comparison, the reference table of paragraph symbols of Vietnamese public accounting standards compared with the notation of international public accounting standards paragraphs is included with this standard. For matters related to other public accounting standards, Vietnam Public Accounting Standard No. 17 quoted by symbol and name of relevant Vietnamese public accounting standards has been promulgated. For standards that have not been issued, this standard only mentions the name of the standard or related content to be referenced, not the number of the relevant standard as in the international public accounting standard No. 17. Specific citation of the symbol and the standard name will be made after the relevant standards are issued.
By the time of promulgation of Vietnamese Accounting Standard No. 17 (in 2021), relevant standards that have not been issued include:
STT | Name of the public accounting standard | Paragraph with reference content |
1 | Rent a property | 5, 36, 59, 61 |
2 | Investment real estate | 6 |
3 | Borrowing costs | 30, 32 |
4 | Accounting policies, changes in accounting estimates and errors | 40, 55 |
5 | Revenue from exchange transactions | 60, 61, 64 |
6 | Provisions, contingent liabilities and contingent assets | 26 |
VPSAS 17 – REAL ESTATE, FACTORY AND EQUIPMENT
The process of promulgating and updating Vietnamese Public Accounting Standard No. 17
(hereinafter referred to as the Standard)
The version of Vietnam Public Accounting Standard No. 17 was first issued under Decision No. 1676/QD-BTC dated September 01, 09 of the Minister of Finance.
This Standard takes effect from September 01, 09, and will be applied from September 2021, 01.
Commonly valid standards include:
– Vietnamese Public Accounting Standard No. 01: Presentation of financial statements;
– Vietnamese Public Accounting Standard No. 02: Statement of cash flows;
– Vietnamese Public Accounting Standard No. 12: Inventory;
– Vietnamese Public Accounting Standard No. 31: Intangible assets.
VPSAS 17 – REAL ESTATE, FACTORY AND EQUIPMENT
CONTENT
The text of Vietnamese Public Accounting Standard No. 17 “Real Estate, Plant and Equipment” is presented in paragraphs 1 to 70. All paragraphs are equally authentic.
| Paragraph |
I. GENERAL PROVISIONS Purpose Limit Heritage Definitions II. SPECIFIED Record Infrastructure assets Initial expenses Costs after initial recognition Determine the value at recognition Components of the original cost Determine the original price Determine value after initial recognition Depreciation Depreciation value and amortization period Depreciation method Write down assets Information presentation | 1-11 1 2-10 7-10 11 12-69 12-20 16 17 18-20 21-36 24-31 32-36 37-58 38-58 45-53 54-57 58-64 65-69 |
Reference table of paragraphs of Vietnamese public accounting standards compared with paragraphs of international public accounting standards
I. GENERAL PROVISIONS
Purpose
1. The purpose of this standard is to prescribe the accounting method for real estate, plant and equipment so that users of the financial statements can obtain information about the entity's investment in real estate. property, plant and equipment and changes to those investments. The basics for real estate, plant, and equipment accounting are: recognition of assets, valuation of assets, and recognition of asset depreciation expenses.
Limit
2. An entity that prepares and presents financial statements on the accrual basis of accounting applies this standard to accounting for real estate, plant and equipment, unless:
(a) Other accounting methods are applied in accordance with the provisions of other Vietnamese public accounting standards; and
(b) Property is considered estate. However, some of the disclosure requirements set out in paragraphs 66 and 67 apply to recognized estate assets.
3. This Standard applies to property, plant and equipment, including:
(a) Infrastructure; and
(b) Concession agreement assets after initial recognition and valuation (The franchisor).
4. This Standard does not apply to:
(a) Biological assets associated with agricultural activities that are not perennials for the product. This Standard applies to perennials for the product but not to products on that perennial;
(b) Mining rights and mineral reserves such as oil, natural gas and similar non-renewable resources.
However, this standard applies to property, plant, and equipment used to develop or maintain the properties referred to in 4(a) or 4(b).
5. Other Vietnamese public accounting standards may require the recognition of an item of real estate, plant and equipment under an approach different from that of this standard. For example, the Vietnamese public accounting standard on leases provides for the initial assessment and recognition of leased property, plant and equipment on the basis of the transfer of risks and rewards of the parties; or provide for the initial assessment and recognition of property, plant, and equipment used in a service concession on an asset control basis. However, in such cases other accounting rules for these assets, including depreciation, are provided in this standard.
6. The unit using the historical cost model for investment properties in accordance with Vietnamese public accounting standards for investment properties applies regulations on determining value after initial receipt and depreciation for this standard.
Heritage
7. This Standard does not require an entity to recognize properties even though they meet the definition and criteria for recognizing property, plant, and equipment. If an estate is registered, the presentation requirements of this standard shall apply and may, but are not required, the determination provisions of this standard.
8. Some properties are considered heritage because of their cultural, environmental or historical significance. Examples include historic buildings, memorials, archaeological sites, antiquities, national treasures, exhibits in museums, monuments, conservation areas and nature reserves, and artwork. Heritage properties often exhibit certain characteristics (although these characteristics are not unique to such properties), including:
(a) Their cultural, environmental, educational and historical value cannot be fully reflected in a financial value determined solely on the basis of market prices;
(b) The law prohibits or severely restricts the sale of these properties;
(c) These assets are generally irreplaceable and their value may increase over time although their physical condition may decline; and
(d) It is difficult to estimate the useful life of these assets, up to several hundred years in some cases.
Public sector entities can hold large amounts of heritage that has been received over the years and in a variety of ways, including acquisition, donation, administration and confiscation. These assets are rarely held for economic purposes and there may be social or legal barriers to their use for economic purposes.
9. Some properties in addition to heritage value have potential future economic or service benefits, for example a historic building used as an office. In these cases they can be recognized and valued on the same basis as other items of real estate, plant and equipment. For other sites, potential future economic benefits or services are limited by their heritage features, such as monuments and monuments. The existence of both future economic benefits and potential services can influence the choice of the basis of valuation.
10. The disclosure requirements in paragraphs 66 to 70 require an entity to disclose information about recognized assets. Therefore, entities that recognize assets as heritage must present information about these assets on such aspects as:
(a) The basis of valuation to be applied;
(b) The method of depreciation applied, if any;
(c) Original cost;
(d) Accumulated depreciation at the end of the period, if any; and
(e) A balance sheet reconciliation at the beginning and the end of the period, showing certain items.
Definitions
11. The terms in this Standard are construed as follows:
Real estate, plant and equipment are tangible assets:
(a) Is held for use for management purposes or for the production, supply of goods, services, or rental; and
(b) Estimated useful life per reporting period.
Perennial plants for the product are live plants:
(a) Used in the manufacture or supply of agricultural products;
(b) Expected release of product for more than one period; and
(c) Less likely to be sold as agricultural products, except in the case of unscheduled liquidation.
Residual value (applicable to this Standard) is the amount of the asset recognized after deducting accumulated depreciation.
Depreciable value is the historical cost of the asset or other value that substitutes for its original cost minus (-) the recoverable liquidation value.
The salvage value of an asset is the estimated amount that an entity would obtain from the disposal of the asset, after deducting the estimated costs of disposal, if the asset were due for disposal or exhausted. useful time.
Depreciation is the systematic allocation of the depreciable value of an asset over its useful life.
Real estate, plant and equipment are assets that have a similar nature or function in the operations of the entity, which are reported as a separate item for presentation purposes in the financial statements.
Service Franchise Asset: An asset used to provide a public service in a service franchise agreement:
(a) Case provided by the operator:
(i) Is an asset built, developed by the operator or purchased from a third party; or
(ii) Is an existing property of the operator.
(b) Where provided by the licensor:
(i) Is the available property of the licensor; or
(ii) An asset upgraded from an existing property of the licensor.
Service franchising agreement is a binding agreement between the licensor and the operator, in which:
(a) The operator uses the service franchising asset to provide a public service on behalf of the licensor for a specified period of time; and
(b) The operator is compensated for its portion of the service for the duration of the service concession agreement.
The useful time of use is:
(a) The length of time for which an asset is expected to be usable by the entity;
(b) The number of products produced or similar units expected to be generated by the entity from the asset.
Terms defined in other Vietnamese Public Accounting Standards as used in this Standard have the same meanings as in those Standards.
II. SPECIFIED
Record
12. The cost of an item of property, plant and equipment must be recognized as an asset if and only if:
(a) It is probable that future economic benefits or services will flow to the entity from the asset; and
(b) The historical cost or fair value of the assets can be reliably measured.
13. Items such as spare parts, spare parts, and maintenance equipment are recognized under this standard when they meet the definition and recognition criteria for property, plant, and equipment. . If the definition and recognition criteria for property, plant, and equipment are not met, these items are classified as inventory.
14. This Standard does not provide for the identification of the individual assets constituting an item of real estate, plant and equipment upon recognition. Therefore, an entity must evaluate the application of the asset recognition criteria on a case-by-case basis. Aggregation of single assets that do not have a high value, such as library books, computer accessories, and small appliances to apply the attribution criteria to the total value may be considered appropriate.
15. An entity must apply this recognition principle to the historical cost of property, plant, and equipment as they arise. Historical cost includes the initial costs incurred in acquiring or constructing an item of real estate, plant and equipment and subsequent costs to add or replace parts or accessories to the asset. there.
Infrastructure assets
16. Some assets are classified as infrastructure. Infrastructure assets typically exhibit some or all of the following characteristics:
(a) These assets are part of a system or a network;
(b) These assets are specialized in nature and have no alternative uses;
(c) These assets cannot be moved; and
(d) These properties may be subject to resale restrictions.
Entities in the public and business sectors may own or be assigned to manage infrastructure, where key infrastructure is usually managed in the public sector. Infrastructure meets the definition and recognition criteria for property, plant, and equipment and must be accounted for in accordance with this standard. Examples of infrastructure include: Road system, airport system, airport system, railway system, maritime system, internal waterway system, irrigation works system, infrastructure industrial parks, export processing zones, commercial infrastructure, drainage systems, clean water and energy supply systems, telecommunications systems.
Initial expenses
17. Items of real estate, plant and equipment may be purchased for safety or environmental reasons. The purchase of these properties, plant, and equipment, even though it does not directly increase the potential future economic benefits or services of a particular existing item of property, plant, and equipment. , but are necessary for the entity to perform the assigned duties or to obtain future economic benefits or potential services from other assets.
These items of property, plant, and equipment qualify to be recognized as assets because they enable the entity to perform its assigned duties or to derive potential future economic benefits or services from it. other assets than would be obtained without them. For example, fire prevention regulations require a hospital to install a new fire prevention and fighting system. These systems are recognized as assets because without them the hospital could not function properly.
Costs after initial recognition
18. Subject to the recognition principle set out in paragraph 12, an entity may not include costs of continuing operations of an item of property, plant, and equipment in the cost of that asset. Instead, these costs are recognized in the surplus or deficit in the period when they are incurred. Basic daily maintenance costs include labor and materials costs, and may include the cost of replacing small parts. The purpose of these expenses is generally considered to be for “repair and maintenance” of property, plant, and equipment.
19. Certain parts of real estate, plant and equipment items may require periodic replacement. For example, the surface of a road may have to be redone after a certain number of years. Properties, plant, and equipment may also have to perform periodic replacements less frequently (such as replacing interior walls in a building) or have to perform a non-recurring replacement. Subject to the recognition principle described in paragraph 12, an entity recognizes the cost of replacing parts of an item of property, plant, and equipment to the cost of that asset when the replacement cost is incurred if the criteria are met. recognition criteria are satisfied. The cost of replaced parts shall be reduced in accordance with the reduction standards set forth in this standard (see paragraphs 59-65).
20. In order to continue to be used, the property, plant and equipment should undergo regular major technical inspection, detecting damage regardless of whether parts of the property need to be replaced or not. The cost of that major inspection is charged to the cost of the fixed asset as a replacement cost if the recognition criteria are met. The portion of the original cost of the previous inspection (separate from the value of physical parts) is written off when the new cost is recognised. This is independent of whether the cost of a prior inspection has been determined when purchasing or building the property. Where necessary, the estimated cost of future similar inspections may be used as a basis for determining the cost of an existing audit when acquiring or constructing the property.
Determine the value at recognition
21. Items of real estate, plant and equipment meeting the asset recognition criteria must be valued at the historical cost of the asset.
22. When assets are acquired through a non-exchange transaction, their historical cost is determined at their fair value at the date of receipt.
23. An entity may obtain an item of real estate, plant and equipment through a non-exchange transaction. For example, land may be allocated by the state to manage the construction of parks and roads. The entity may also obtain assets through a non-exchange transaction by receiving forfeited property. In these cases, the historical cost of the asset is its fair value at the date of receipt.
Components of the original cost
24. The historical cost of a property, plant and equipment includes:
(a) The purchase price of the property, including import duties and taxes on the purchase of the property, is non-refundable or non-deductible, after deductions for trade discounts and rebates.
(b) Expenses directly attributable to bringing the asset to the location and condition necessary to be ready for operation as intended by the entity.
(c) An initial estimate of the costs of dismantling, moving, and clearing the premises incurred by the entity when acquiring the asset or using the asset for a specified period of time for purposes other than to produce inventory during that time.
25. Examples of direct costs are:
(a) Costs to employees arising directly from the construction or acquisition of real estate, plant and equipment;
(b) Site preparation costs;
(c) Initial shipping and handling costs;
(d) Installation cost;
(e) Trial costs after deducting proceeds from the sale of products manufactured in the process of bringing the asset to its location and ready for operation (e.g. prototypes manufactured). when testing equipment); and
(f) Expertise fees.
26. An entity applies Vietnamese public accounting standard No. 12 “Inventories” in case the cost of dismantling, moving and restoring the premises of a fixed asset arises during a specific period of time. that the asset is used to create inventory. Expenses for dismantling, moving and restoring the premises accounted for as prescribed in VPSAS 12 or VPSAS 17 are recognized and valued in accordance with the provisions of Vietnamese public accounting standards on provisions and liabilities. contingent payments and contingent assets.
27. Examples of expenses not included in the cost of property, plant and equipment:
(a) The cost of opening a new factory;
(b) Expenses for introducing new products or services (including costs for advertising and promotional activities);
(c) Expenses for expanding the business in a new location with new customer segments (including staff training costs); and
(d) Administrative and other general expenses of the entity.
28. Cost recognition of property, plant and equipment ceases when the assets are at the location and ready-to-operate state as intended by the entity. Therefore, costs incurred in the process of using or redeploying an asset are not included in the historical cost of that asset. For example, the following costs are not included in the cost of property, plant, and equipment:
(a) Expenses incurred when the asset is already capable of operating for the entity's intentions but has not yet been put into use or the asset is operating at less than maximum capacity;
(b) Initial operating losses, i.e. those incurred as demand for output increases; and
(c) The cost of moving and restructuring part or all of the entity's operations.
29. Certain activities occur in connection with the construction or development of real property, plant, and equipment but do not necessarily bring the property to the location and ready-to-operate state as intended by the application. taste. These activities may arise before, during the construction or development of the property. For example, an entity can use a construction site as a parking lot to collect money until construction begins. These activities do not necessarily bring an asset to a location and ready for operation, the revenue and related costs of these activities are recognized in the surplus or deficit for the period, which is classified classified into revenues and expenses for the period.
30. The historical cost of an asset created by the unit itself is determined on the same principle as the purchased asset. If an entity creates similar assets for sale in the normal operating cycle, the cost of the asset is the cost of creating an asset for sale (see Vietnamese Public Accounting Standard No.Inventory"). Therefore, internal surplus is eliminated when calculating the historical cost of the asset. Similarly, the cost of raw materials, labor or other costs incurred in excess of normal in the creation of the asset are excluded from the cost of the asset. The recognition of interest expense in the historical cost of an item of real estate, plant and equipment created by the entity itself shall comply with the provisions of Vietnamese public accounting standards on borrowing costs.
31. Product perennials are accounted for as property, plant and equipment created before they are in the location and ready-to-operate state as intended by the entity. Therefore, the term “generating” in this standard is understood to include the activities necessary to cultivate perennial crops for products before they are at the location and ready-to-operate state for the purpose of the application. taste.
Determine the original price
32. Cost of property, plant and equipment is the cash equivalent purchase price or fair value for the assets referred to in paragraph 22 at the date of recognition. If the property is paid by deferred payment, the difference between the purchase price and the total amount of the deferred payment is recognized as interest expense during the deferred payment period, unless the interest This is recognized in the asset's value in accordance with the accepted alternative method specified in Vietnamese Public Accounting Standards on borrowing costs.
33. An entity may acquire one or more real estate, plant and equipment through an exchange for one or more non-monetary assets or a combination of both monetary and non-monetary assets. . The provisions below refer only to the exchange of one non-monetary asset for another, however, also apply to all exchanges mentioned above. The cost of real property, plant and equipment received is the fair value of the property unless the exchange is non-commercial or it is not possible to reliably determine the fair value of the property. property received and property exchanged. The historical cost of the asset received is determined in the above manner even if the entity cannot immediately write down the exchanged asset. If it is not possible to determine the historical cost of the property received at fair value, it must be determined according to the carrying amount of the exchanged assets.
34. An entity shall determine whether an exchange transaction is of a commercial nature by considering the expected change in potential future cash flows or services from the transaction. An exchange is commercial if:
(a) The components (risk, time, value) of the cash flows or potential services of the asset to be received are different from the components of the cash flows or the potential services of the asset to be received. go to exchange; and
(b) The difference in item (a) is significantly related to the fair value of the assets exchanged.
35. In the absence of comparable market transactions, the fair value of an asset can be reliably determined if: (a) the difference between the fair value estimates is insignificant for the asset, or (b) the likelihood that different estimates could have been appropriately evaluated and used to estimate fair value. If an entity is able to reliably determine the fair value of the asset received or exchanged, the fair value of the exchanged asset is used to determine the cost of the asset. property received, unless there is clearer evidence of the fair value of the property received.
The historical cost of a property, plant and equipment held by the lessee under a lease is determined in accordance with Vietnamese public accounting standards on leases.
Determine value after initial recognition
37. Once recognized as an asset, a property, plant and equipment is stated at cost less accumulated depreciation.
Depreciation
38. Each part of real estate, plant and equipment that has a substantial value in its total cost must be depreciated separately.
39. An entity allocates the initial recognition amount of property, plant, and equipment to significant parts of that asset and depreciates each of these separately. For example, for a road system, an entity can separately depreciate sidewalks, pavements, curbs, pipelines, walkways, bridges and lighting in a road system. Similarly, if an entity purchases property, plant, and equipment for an operating lease of which it is the lessor, it can separately depreciate the amounts reflected in the cost of the asset. arising from lease terms favorable or unfavorable compared with market conditions.
40. Significant parts of real estate, plant and equipment with similar useful lives and depreciation methods can be aggregated when calculating depreciation.
41. When an entity calculates the separate depreciation of some parts of the property, plant and equipment, it also calculates the depreciation of the remainder of that asset separately. The remainder consists of single parts of negligible value. If an entity has different estimates for the remainder, it must use approximation methods to calculate the residual depreciation such that the value of the consumables and/or useful life of the components. This section is presented honestly.
42. An entity may choose to depreciate separately for each part of the property, plant and equipment whose value is insignificant compared to the total cost of that asset.
43. Depreciation expense incurred in each period must be recognized in the surplus or deficit for that period, unless the depreciation expense is included in the value of another asset.
44. Depreciation expense in a period is normally recognized in the surplus or deficit for that period. However, in some cases, future economic benefits or potential services associated with an asset are used by the entity to produce other assets. In this case, the depreciation expense is part of the cost of another asset and is included in the cost of this asset. For example, depreciation of a plant and production equipment is included in the cost of processing inventory (see Vietnamese Public Accounting Standard No.Inventory"). Similarly, depreciation of real estate, plant and equipment used for implementation activities can be charged to cost of intangible assets recognized in accordance with Vietnamese Public Accounting Standard No. 31.”Invisible treasure".
Depreciation value and amortization period
45. The depreciable value of an asset must be allocated systematically over the useful life of the asset.
46. The salvage value and useful life of assets must be reviewed at least every annual reporting period. If there are changes from previous estimates, such changes must be recognized as a change in an accounting estimate in accordance with Vietnamese public accounting standards on accounting policies, change in accounting estimate, and error.
47. Depreciation must be recognized even if the fair value of the asset exceeds its carrying amount, provided that the recoverable amount of the asset does not exceed the carrying amount of the asset. there. The repair and maintenance of an asset does not negate the necessity of depreciating that asset. Conversely, some properties may not be well maintained or serviced, or maintenance may be delayed indefinitely due to budget constraints. When asset management increases the natural wear and tear of an asset, the useful life of the asset must be reassessed and adjusted accordingly.
48. The depreciable value of an asset is determined after deducting its recoverable liquidation value. In practice, the salvage value of an asset is often insignificant and therefore does not have a significant effect on the calculation of the amount to be depreciated.
49. The salvage value of an asset may increase to an amount equal to or greater than its carrying amount. In this case, the depreciation expense is zero, unless and until the recoverable amount of the asset is subsequently reduced to less than its carrying amount.
50. Depreciation begins when an asset is put into service, in particular, when the asset is in the location and condition necessary to be ready for the entity's intended operation. Depreciation ends when the asset is written down. Therefore, depreciation is not discontinued when the asset is temporarily or inactive and held for disposal, unless the asset is fully depreciated. However, under the output depreciation method, the depreciation expense can be zero when there is no production activity.
51. Potential future economic benefits or services associated with a property, plant, and equipment that are acquired primarily by the entity through the use of the asset. However, other factors such as technical or commercial obsolescence and natural wear and tear when the asset is not in regular use lead to a reduction in the potential economic benefits or services that the asset may receive. that can bring. Therefore, when determining the useful life of an asset, the following factors should be considered:
(a) The entity's estimated use of the asset. Usage is estimated through expected capacity or output.
(b) Expected physical wear and tear, which depends on operational factors such as the number of shifts in which the asset will be used, the repair and maintenance program, and the care and maintenance of the property during inactivity time.
(c) Technical or commercial obsolescence arising from changes or improvements in production or from changes in market demand for products or services that are outputs of assets. A decrease in the expected future selling price of a manufactured product may indicate the expected technical or commercial obsolescence of the asset used, which may reflect a decrease in economic benefits. future or potential service of that asset.
(d) Legal or similar restrictions on the use of the property, such as the expiration date of leases.
52. The useful life of real estate, plant and equipment is determined based on the benefits of the asset to the entity. The Property Management Policy applicable to the entity may prescribe the asset. assets are disposed of after a specified period of time or after a certain percentage of the total future economic benefits or potential services associated with the asset have been obtained. As a result, the asset's useful life for the entity may be shorter than its actual useful life. Estimates of the useful life of a property, plant, and equipment are based on the entity's experience with similar assets.
53. Land use rights and buildings on land are two separate assets and are accounted for separately even if they are purchased together. Buildings have a limited useful life, so they must be depreciated. An increase in the price of the land on which the building is built does not affect the determination of the depreciable value of the building.
Depreciation method
54. The depreciation method must reflect the manner in which the entity expects to obtain future economic benefits or potential services from the asset.
55. The depreciation method applied to assets must be reviewed at least every annual reporting period. If there is a significant change in the manner in which future economic benefits or potential services will be derived from the entity's assets, the depreciation method must be changed to accommodate the new method. Such changes must be recognized as a change in the accounting estimate in accordance with the provisions of Vietnamese Public Accounting Standards on accounting policies, changes in accounting estimates and errors.
There are a variety of depreciation methods that can be used to systematically allocate the depreciable value of assets over their useful lives. These methods include straight-line depreciation, declining balance depreciation, and production-based depreciation. Depreciation costs on the straight-line method do not change over the useful life of the asset if the asset's liquidation value does not change. Under the diminishing balance method, the depreciation expense decreases over the useful life of the asset. Depreciation cost under the yield method is calculated based on the quantity of product produced or the estimated usage of the asset.
An entity must choose to apply the amortization method that best reflects the manner in which the future economic benefits or potential services associated with the asset will be obtained. That method must be applied consistently from period to period unless there is a change in the manner in which future economic benefits or potential services will be obtained from the asset.
57. Depreciation method based on revenue generated from activities using assets is not suitable. Revenue generated from an activity using an asset generally reflects factors other than the recovery of the asset's potential service or economic benefits. For example, revenue is affected by other inputs and processes, sales activity, and changes in sales volume and price. The price factor in sales can be affected by inflation but not by the way assets are used.
Write down assets
58. The carrying amount of hunting property, plant and equipment must be reduced when:
(a) Liquidation of assets, transfer of assets; or
(b) When there are no longer future economic benefits or potential services from the use or disposal of the asset.
59. Gain or loss arising from a write-down of real estate, plant and equipment must be recognized in the surplus or deficit in the period in which the asset is written off (except in the case of Vietnamese public accounting standards). property lease has different provisions on asset sale and sublease).
60. However, if, during the normal operating cycle, an entity regularly sells real estate, plant and equipment that it holds for sublease purposes, it must account for these assets. is inventory at the carrying amount of the asset when the asset is not leased or sold. Proceeds from the sale of these assets must be recognized as revenue in accordance with Vietnamese public accounting standards on revenue from barter transactions.
61. A write-down of a property, plant and equipment can take many forms (for example, sale, finance lease or donation). When determining when to write down assets, an entity must apply the standards in Vietnamese public accounting standards on revenue from exchange transactions to recognize revenue. Vietnamese Public Accounting Standard on Leases applies to the write-down of an asset by selling and then subleasing the asset itself.
62. According to the recognition principle in paragraph 12, if an entity recognizes the value of a replacement part in the cost of real property, plant and equipment, it must write down the carrying amount of the part. replaced, regardless of whether the part being replaced is depreciated separately. If the entity cannot determine the residual value of the replaced part, it may use the value of the replacement part as the basis for calculating the residual value of the replaced part when the part is replaced. purchased or built.
63. Gain or loss arising from the write-down of a property, plant and equipment is determined as the difference between the net proceeds from disposal (if any) and the carrying amount of the asset.
64. Receivables from the disposal of real estate, plant and equipment are initially recognized at fair value. If assets are liquidated on a deferred basis, the receivable is initially recognized at the cash equivalent selling price if paid immediately. The difference between the immediate purchase price and the total amount of the deferred payment method is recognized as interest earned during the deferred payment period in accordance with Vietnamese public accounting standards on revenue from transactions. exchange.
Information presentation
65. The financial statements must present the following information about each group of property, plant and equipment recognized in the financial statements:
(a) The basis of valuation used to determine cost;
(b) The method of depreciation applied;
(c) The useful life or the applicable depreciation rate;
(d) Cost and accumulated depreciation at the beginning and end of the period; and
(e) A reconciliation of the carrying amount of the assets at the beginning and the end of the period, showing the following information:
(i) Increases during the period;
(ii) Number of receipts through merger of public entities;
(iii) Number of liquidation and transfer in the period;
(iv) Depreciation amount in the period;
(v) Net exchange differences arising from the conversion of financial statements from one accounting currency to another, including the conversion of an entity's financial statements overseas operations into the entity's reporting currency; and
(vi) Other changes.
66. The financial statements must also present the following information about each class of property, plant and equipment recognized in the financial statements:
(a) The limits and value of real estate, plant and equipment as collateral to secure liabilities;
(b) Expenses are recognized in the value of real estate, plant and equipment under construction;
(c) The value of commitments to purchase property, plant, and equipment.
67. The selection of the depreciation method and the estimation of the useful life of the assets shall be selected by the entity within the framework of the law. Therefore, presenting information about the depreciation method and the estimated useful life or rate of depreciation provides users of financial statements with information that enables them to make an assessment of the policy. accounting that the entity uses and compares it with other entities. For similar reasons, an entity must disclose information about:
(a) Depreciation is recognized in the surplus or deficit during the period or recorded in the cost of other assets during the period; and
(b) Accumulated depreciation at the end of the period.
68. An entity must disclose information about the nature and effect of a change in an accounting estimate that affects the current period or is expected to affect future periods. In this case, for real estate, plant and equipment, the entity must disclose information when there is a change in the estimate relating to:
(a) Recoverable liquidation value;
(b) The estimated cost of dismantling, moving or restoring property, plant and equipment;
(c) Useful life; and
(d) Depreciation method.
69. Entities are encouraged to submit additional disclosures, as users of financial statements may need the following information:
(a) The value of temporarily unused real property, plant and equipment;
(b) The value of real estate, plant and equipment has been depreciated but is still in use;
(c) Value of property, plant and equipment that are no longer in use and awaiting disposal.
Reference table of paragraphs of Vietnamese public accounting standards compared with paragraphs of international public accounting standards
VPSAS number 17 | IPSAS number 17 |
| VPSAS number 17 | IPSAS number 17 |
1 | 1 |
| 36 | 41 |
2 | 2 |
| 37 | 43 |
3 | 5 |
| 38 | 59 |
4 | 6 |
| 39 | 60 |
5 | 7 |
| 40 | 61 |
stink | 8 |
| 41 | 62 |
7 | 9 |
| 42 | 63 |
8 | 10 |
| 43 | 64 |
9 | 11 |
| 44 | 65 |
10 | 12 |
| 45 | 66 |
11 | 13 |
| 46 | 67 |
12 | 14 |
| 47 | 68 |
13 | 17 |
| 48 | 69 |
14 | 18 |
| 49 | 70 |
15 | 19 |
| 50 | 71 |
16 | 21 |
| 51 | 72 |
17 | 22 |
| 52 | 73 |
18 | 23 |
| 53 | 74 |
19 | 24 |
| 54 | 76 |
20 | 25 |
| 55 | 77 |
21 | 26 |
| 56 | 78 |
22 | 27 |
| 57 | 78A |
23 | 28 |
| 58 | 82 |
24 | 30 |
| 59 | 83 |
25 | 31 |
| 60 | 83A |
26 | 32 |
| 61 | 84 |
27 | 33 |
| 62 | 85 |
28 | 34 |
| 63 | 86 |
29 | 35 |
| 64 | 87 |
30 | 36 |
| 65 | 88 |
31 | 36A |
| 66 | 89 |
32 | 37 |
| 67 | 90 |
33 | 38 |
| 68 | 91 |
34 | 39 |
| 69 | 94 |
35 | 40 |
|
|
|